NANOG67 - Tipping point of community and sponsor bashing?

Fri Jun 17 11:50:47 UTC 2016

I think the popularity of the donation-based IX largely a violent reaction to the over-priced major IX operators in the US. People didn't like what was happening, so went to the polar opposite. 

----- 
Mike Hammett 
Intelligent Computing Solutions 
http://www.ics-il.com 

Midwest Internet Exchange 
http://www.midwest-ix.com 

----- Original Message -----

From: "Nick Hilliard" <nick at foobar.org> 
To: "Dave Temkin" <dave at temk.in> 
Cc: "NANOG list" <nanog at nanog.org> 
Sent: Thursday, June 16, 2016 6:45:22 PM 
Subject: Re: NANOG67 - Tipping point of community and sponsor bashing? 

Dave Temkin wrote: 
> They are representative of the most important IXPs to deliver traffic 
> from in Western Europe. 

I don't doubt that they are important IXPs for delivering traffic. 
However, no other IXP in europe (both eastern and western) is doing 
expansion outside the countries that they operate in, other than three 
out of the four that you mentioned; none of the member-owned 
organisations in the region are making large profits or in most cases 
anything more than marginal profits, and all of them have lower port 
costs. Also, none of their activities suggest that their marketing 
budgets are large. These, I think, were the main points of contention 
you were concerned about. 

> I would posit that what defines important to me may not be what defines 
> important to you and the same can be said when you look at how various 
> "internet" companies look at what's important in their vertical. 

We're not talking about relative importance; we're talking about whether 
the problems you identified with the four IXPs named in your talk are 
representative of problems with the larger IXP community. I cannot find 
evidence that they are, at least not in the areas that you identified as 
problems. 

> Netnod runs a dns root server 
> system (i.root-servers.net <http://i.root-servers.net>) as well as a 
> heavy duty time service. 
> 
> There are others who do this for no cost and some who do it for 
> government money. Whether or not my port fees should subsidize this is a 
> valid question, and was brought up in the Q&A afterwards. 

All root operators do this for no charge, but at substantial cost. 

Running a root dns server system is one of the things what Netnod does 
because that's one of the things that the organisation is chartered to do. 

> Regarding the pricing reduction on page 16 of your preso, the US$ and 
> UK£ are not much different than what they were 5 years ago, but the € 
> has dropped by 30% against the US$. 
> 
> You speak to this below, however if my business is primarily run in USD 
> (which was the relevant use case presented: I'm a US company deciding if 
> I should peer in Europe or buy transit) then those currency fluctuations 
> have a very different impact than if I'm a European company functioning 
> primarily in local currency. 

Oh sure, but this is a matter that you need to take up with your 
financial people. I have no doubt that Netflix employs smart financial 
people, and that their decisions are the right thing for Netflix. 

IXPs are going to operate in their local currency and they cannot be 
held responsible for international currency fluctuations. From this 
respect, I don't think it's useful to bring this up in a critical 
context because it's not something that they can influence in any way 
whatever. 

> I did purposefully mention SIX as a polar opposite example - there is 
> definitely a happy medium to be found. 

This edges into one of the things that is crucial to this discussion, 
and it was unfortunate that it wasn't explored more. The crux is that 
there is a substantial cultural difference between how US people view 
IXPs and how european people view IXPs. 

As far as I can tell there are, for the most part, two types of IXPs in 
the US: commercial and co-operative. How they differ from european IXPs 
is that the commercials are almost all run by the data centres and are 
tied to those data centres. Most if not all of the co-operative IXPs 
are to some degree or other financed by donations or sponsorship and the 
donation types are: cash, equipment and manpower. 

In europe, there are three types of IXP: commercial, member based and 
non-member, non-profit. Many of the commercial IXPs are not owned by 
the data centres (e.g. NL-IX, ECIX, etc). The member-owned IXPs are 
answerable fully to their membership (e.g. LINX, INEX), and the 
non-member, non-profit IXPs (Netnod, VIX, etc) provide a service to the 
community as they see fit, but are not required to answer to the 
organisations who use them for peering services, even if they are likely 
to listen to what those organisations say. 

Crucially, almost all of the european non-profit IXPs are 100% 
self-funded without donations, sponsorship or subsidisation of manpower. 
They have offices, admin people, support staff and everything else that 
a normal business has. IXP staff are paid market rates because if you 
don't do this, they walk. 

They do this because this having a dependable income source ensures long 
term stability and their members / customers / peering participants need 
to know that the organisation that supports their business is built on a 
sound structural foundation. This matters to them and they are prepared 
to pay for it. 

The flip side of it is that European non-profit IXPs are, by design, 
more expensive than US non-profit IXPs and there are almost no free / 
zero-recurrent-cost IXPs in the region. 

So I would question comparing a european IXP with e.g. SIX or 
CommunityIX and would suggest that this is a case of apples and bananas. 
Both are yummy, but whether you prefer one or another is a matter of taste. 

How IXPs spend revenue is a different matter. You're right to bring 
this topic up because scrutiny is what keeps things honest. 

Nick 